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We live in the age of falsehood. Take any stated claim of the mass media that is not self evident, invert the meaning of what is said, and you will find yourself closer to knowing the truth than before.

The rate at which an accepted Truth changes nowadays is astounding. The ability of people to endure it may appear even more astounding, but there is a simple explanation, and a single term which contains the answer: cognitive dissonance. It is a psychological tool of deception that is being used increasingly and at every level. People can be trained to accept contradictory (or patently false) ideas through social pressure, for example.

In the cases we present here, the concept of cognitive dissonance is being used to make the public accept blatant falsehoods, probably for nefarious purposes.

Nobel Peace Prize awarded to Warring President

It appears now that the problem with George W. Bush was not what he said, nor what he did, but the way he did it and said it. Barack Obama is continuing along practically the same course as his predecessor, perhaps even more radically, but he’s a smooth talker and his team of spin-doctor-crats are better at waltzing the world into a wider Middle Eastern conflict, again under their totally butchered definition of “peace making”. It’s with such finesse that Obama is performing his given tasks that his masters have seen it fit to crown him with the Nobel Peace Prize. It’s an hypocrisy that is not new, and should not really be a surprise. There is no requirement for there to be any real notion of pacifism to be awarded the prize. You just have to be the darling of the Establishment.

In Obama’s case, he voted consistently for the increased funding of America’s various wars, voted to commend the armed forces for incidents which resulted in mass civilian casualties, opposed the withdrawal of troops from Iraq and Afghanistan, and voted for the appointment of pro-war candidates to key positions, such as the case Robert M. Gates who espouses pre-emptive war. Henry Kissinger, also controversially awarded the Nobel Prize in 1973 (for negotiating peace in Vietnam), at least had the sense of embarrassment to attempt to withdraw his acceptance thereof after he was shown up by Le Duc Tho, also awarded the prize, who rejected the award because peace had not yet been achieved. Obama, having no sense of shame, accepts this award even before he has had any chance to show whether he is anything but a man on the war path.

By swallowing the notion that Obama is a peacemaker, the public is rendered ever more naive and ignorant. The US Administration pursues its war, rendition and torture programmes unabated, only without the protests. The public is being massaged into accepting blatant criminality.

Economic recession declared magically over

It was announced today that, for America at least, the recession is over. It’s time to spend those dollars, because happy days are back again, but is it really true?

In calculus, one studies the slope of a curve, rates of change and rates of rates of change and so on. This allows economists to butcher the truth by studying whatever degree of change that suits them. A downward line might be good because it’s not getting worse, or bad because it’s downward. It all depends on how you wish to mislead your audience. The quantity of bad news is probably decreasing at the moment, which causes optimists to be optimistic, but the quality, the nature of the bad news is the same, only rephrased. All that can be really said about the economy is that there have been changes in the rate of movement of money, but without changes in the fundamental structure of economies.

The second quarter of 2009 saw a small rebound in activity on the international
derivatives exchanges, although trading volumes were still well below the pre-
crisis level two years before. Total turnover based on notional amounts
increased to $426 trillion from $366 trillion in the previous quarter, consistent
with a return of risk appetite.

This can be interpreted to mean that the sun is shining and butterflies are chasing the smell of nectar, but there are many who have claimed for some time that a derivatives crisis is just around the corner. The continuing inflation of the derivatives bubble exposes the reckless abandon of those taking part. Given the massive numbers involved (hundreds of trillions of dollars), a device is being set up which, if it crashes, will dwarf any economic disaster we have seen.

What the renewed derivatives boom represents is the bet (by retailers, banks and others) that times will definitely be rosy in 2010 and beyond. The optimists think they will beat the pessimists (or rather, the hard nosed realists). The whole thing hangs on some important things going right, namely that inflation will not spiral out of control, that interest rates remain low and that unemployment does not blow out. If consumption doesn’t pick up, the bubble goes pop, because pretty soon, with interest rates rising, mortgages will start defaulting again, businesses will close and banks will find themselves high and dry. This is actually a likely scenario, if one takes a look at price versus earnings at the stock exchanges, or if one looks at how much debt had to be taken on by governments to support local employment (frequently in economically destructive ways, such as the demolition of cars before the end of their useful lives), or if one looks at what has changed about consumer habits.

So in simple terms, the economy is “recovering” purely through debt expansion, occurring largely out of sight of the public. Was not debt the cause of the crisis in the first place?

It’s either a riddle or a lie. There can only be a real recovery from this economic crisis through real, structural economic reform. This has not taken place. Our hunch is that the current rally is still a sucker’s rally.

By swallowing the notion that the economy is back on its feet again, the public is fooled into taking excessive risk. If you believe this recovery, you are leaning into a false wind. The public is being set up for a fall, all of which appears to be aimed at removing freedoms and sovereignty.

This still doesn’t stop the political activists of claiming that we are all going to die of, well, climate change. See, now it doesn’t matter what happens, they were right and they can say “we told you so!”

The public is being made to feel guilty and culpable for hot summers, cold winters, rainy days and sunburnt grass. As a result, the public is made to accept whatever completely ridiculous and illogical carbon trading system the various governments dream up. Instead of sensible endeavours (regardless of climate change), such as improving transport infrastructure to be simply more energy efficient, building better houses and having fewer cars, governments are using climate as a way to amass power and money (through taxes).

In summary, cognitive dissonance is a useful thing indeed! But luckily, exposing it breaks the spell.

For anyone who had the hairbrained idea that the latest stock market rally was a sign of the return of the good ol’ days, news signaling future woes continues to flood the financial rags.

The housing market in the US and UK is still extending people’s abilities to accept ever more bad news. The Financial Times reports:

The 25 per cent auction discount and the sluggish market give a strong signal that prices have further to fall. But the recent uptick in the auction market also shows the gap is narrowing.

This can mean either of two things; either the housing market is still tanking (in the UK and US), but a turn-around is coming soon, or the housing market is still tanking, and the increase in sales at auction is due to people who have to live somewhere buying at the 25% discount that results at auction, not realizing that prices will fall further still as more mortgate defaults accumulate (since, in the US, as many as 30% of mortgages are still bigger than the asset value). It certainly suggests that the Australian housing market is not at all a safe place to invest currently, although the statistics still look amazingly good there thanks to the naive First Home Buyers.

Chinese bank lending slowed dramatically in April because of fears that loan growth in the first quarter had been excessive and could pave the way for loans of deteriorating quality, so possibly creating a new round of asset bubbles.

This suggests that nobody there has any real confidence that life is going to get any easier in the near future. Whatever is said of China’s increase in manufacturing, it is occurring in the face of worsening deflation and therefore falling demand. Again we ask, where are the markets going to come from to restart China’s furry toy and other plastic-junk factories? The banks have probably overstepped their mark in spreading around the easy-money:

There have been signs that China’s economy is starting to regain momentum after weak growth in the early months of this year. There was significant growth in fixed-asset investment and industrial output in March. Chinese banks have also lent 4.6 trillion yuan (£460bn) in the first quarter of the year, nearly the total for the whole of last year.

As we described earlier, this is like flogging a dead horse by ramming it with a speeding freight train. Of course the horse will move, but it’s still dead. But according to central bankers such as Jean-Claude Trichet, the recession is over. He is ignoring the magical freight train (the ridiculous amount of new money spirited into existence over the past year) which governments and bankers alike are hoping people will not notice, or at least forget very quickly.

The problems won’t pass until some serious restructuring occurs in advanced economies in order to make them viable. This will take years and, in countries such as Australia, planing for this kind of restructuring (in the form of infrastructure upgrades) is still only talk. Most of this stuff isn’t even on the Parliamentary floor yet.